AngloGold steps up production

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BR Ashanti 0327 Independent Newspapers Chief executive Srinivasan Venkatakrishnan and outgoing chief financial officer Richard Duffy at the release of AngloGold Ashanti's quarterly results in Johannesburg yesterday morning. Photo: Simphiwe Mbokazi

AngloGold Ashanti, South Africa’s largest gold producer, posted higher production numbers in the June quarter, put a lid on costs and said it would guarantee the safety of employees following a quake that rocked its mines near Orkney, North West, last week.

The JSE-listed company said it lost 30 000 gold ounces after the 5.5 magnitude earthquake disrupted production at its Great Noligwa and Moab Khotsong mines. It was not able to indicate when operations would return to normal.

AngloGold said it was in the process of restarting the Great Noligwa and Moab Khotsong mines in phases after they were shut down in the aftermath.

The first shift resumed last night and repairs to infrastructure are still under way.

Crews had been sent underground to inspect vertical shafts and underground workings and to guarantee workers’ safety, the company said.

“The last thing we wanted to do was to tempt fate. We want to ensure that it is safe underground for production,” chief executive Srinivasan Venkatakrishnan said on the sidelines of the presentation of financial results for the June quarter yesterday.

About 3 300 employees had to be evacuated from the Great Noligwa and Moab Khotsong mines following the earthquake, and 28 mineworkers were injured.

“Safety remains the top priority in restarting these operations as we ramp up production levels, which will take some time to complete,” Mike O’Hare, AngloGold Ashanti’s chief operating officer for South Africa, said.

“At no point will safety be compromised.”

The quake also affected surface operations at its uranium subsidiary, which was hit by an extended power cut.

Group output rose by 17 percent in the June quarter following a strong performance from local operations as well as the contribution by the Kibali mine in the Democratic Republic of Congo and the Tropicana operation in Western Australia, the company said.

Group production rose to 1.098 million gold ounces at an average cost of $836 an ounce from 1.055 million gold ounces at $770 an ounce the previous quarter.

The company said it exceeded its guidance of between 1.05 million and 1.08 million gold ounces at an average cost of between $850 and $870 an ounce.

South African production rose to 319 000 gold ounces in the second quarter from 307 000 ounces in the second quarter of last year.

AngloGold said it had reined in expenditure on marketing and exploration costs.

Expenditure on corporate and marketing costs declined by 65 percent year on year and spending on exploration and evaluation costs fell by 58 percent from a year earlier. This helped to drive down operating costs by 19 percent to $1 060 an ounce, the company added.

Its net loss in the quarter to June declined to $80 million (R851.8m) from $2.17 billion in the same period last year.

Total capital expenditure in the June quarter was $311m compared with $274m in the previous quarter.

AngloGold previously announced it had appointed Christine Ramon as its chief financial officer from October 1. Ramon is the former chief financial officer at petrochemical group Sasol.

AngloGold shares advanced 1.2 percent to close at R191.61 on the JSE yesterday.


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